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Lime entered 2022 with a very robust capital base, helping it survive the liquidity crunch that many firms on Wall Street had to face.
American micro-mobility and electric scooter company Lime has announced a full year of profitability in 2022 for the first time in its history. According to a Techcrunch report, the company said its profitability is based on both the adjusted and the unadjusted basis.
Lime said its adjusted EBITDA profitability came in at $15 million and an unadjusted profit of $4 million. The reported profitability is notably a bragging right for Lime which operates in an industry with a generally shrinking capital base. The global economic strain that was experienced last year hit its competitors hard, but CEO Wayne Ting said the firm has managed to stay afloat.
According to Ting, the company’s reported profitability is based on a one-time stock-based compensation expense, as well as “old depreciation that was embedded, which is less important than the future capex spend.”
Per Lime’s business model, it said it offers convenient and reliable short-term rentals of electric bikes and scooters at affordable prices in more than 200 cities in nearly 30 countries on five continents. Despite its broad-based coverage, the scooters only appeal to a limited market size, and to those who currently value sustainable transportation.
The company said it was able to find a way to make the business a sustainable one, and it is now looking at making a move for an Initial Public Offering (IPO). With its current financials, Lime is optimistic should it eventually file for an IPO, it will be because it wants to go public, not because it just wants to raise capital for survival.
A lot of its competitors have explored public listing to fulfill the latter need. The Special Purpose Acquisition Company (SPAC) route remains one of the most explored for the micro-mobility industry. Two of Lime’s biggest competitors, Bird and Helbiz have explored this option in the past.
Lime Profitability Triggers
While Lime has faced a lot of significant headwinds over the past years, 2022 was a different year for the firm. The company entered the year with a very robust capital base, helping it survive the liquidity crunch that many firms on Wall Street had to face.
“We were fortunate enough to raise over $500 million in 2021, so we came into 2022 with a very strong cash position,” said Ting. “Now we’re burning very little, and we have unlimited runway. We continue to invest in markets at a moment where a lot of our competitors are pulling back precisely because they can’t make money doing this.”
While its competitors and even renowned tech giants were laying off staff, Lime employed about 150 new staff on a permanent basis last year. The firm said it recorded gross bookings of $466 million in the 2022 fiscal year. With its impressive showoff last year, the company said it is expecting to become free cash flow positive by the end of this year or next.